The Best Credit Cards of 2018

To help you find the best credit card for your particular needs, Moneymunk has thoroughly researched the best credit cards currently available. Depending on your financial health, or your individual spending goals, there are several credit cards on the market to make the most out of your spending.

With this guide, we break down our favorite types of credit cards and discuss the best ways to use them to maximize the value of your spending. We also explore the best ways to keep your card secure, as well as how many cards you should have to begin with.

Wells Fargo Cash Wise Visa

Card Type

Description

Wells Fargo Cash Wise Visa

Cash back

Simple unlimited cash back card and robust signup bonus

US Bank Visa Platinum

Balance Transfer

Long-term balance transfers and a long introductory APR period

Chase Freedom

Rewards

targeted rotated spending to maximize rewards

Chase Freedom Unlimited

Rewards

Best for unlimited cash back on every purchase

Capital One Savor Dining Rewards

Cash Back

Best for unlimited cash back on dining and groceries

US Bank Cash+ Visa Signature

Cash Back

Best for creating customizable reward tiers

Chase Sapphire Preferred

Travel

travel rewards and transferring rewards points from other Chase cards

US Bank Altitude Reserve Visa Infinite

Travel

Travel cards with sizable signup bonuses and triple points

CapitalOne VentureOne Rewards Card

Travel

Best for gaining miles on hotel bookings

American Express Blue Cash Preferred Card

Rewards

Best for maximizing rewards at supermarkets

Discover it Chrome for Students

Student

Best for student cardholders looking to build credit

Chase Ink Business Preferred

Business

Best for business cards with travel rewards and a robust sign-up bonus

CapitalOne Premium

Low Credit

Best for rebuilding bad credit

Wells Fargo Platinum

Balance transfer

Best for transferring balances to a 0% interest card for 15 months

Bank of America Cash Rewards

Cash Back

Best for no-interest cash back rewards on gas and grocery store purchases

What types of credit cards are out there?

Credit cards typically fall into categories, and picking a credit card type is often a good starting point before you start looking at individual cards, especially if you haven't had many credit cards before or if you'd like to apply for cards for a specific purpose.

Rewards Cards

Rewards cards are credit cards that allow you to accumulate rewards for using it for purchases. These rewards can take many different forms, from points to miles to cash back rewards for every dollar you spend. These cards offer you the opportunity to redeem these rewards for merchandise, discounts on travel or other purchases, or even statement credit on your card.

For the most part, rewards credit cards will offer a points system in which you earn 1 point for every dollar you spend on the card. You then redeem those points at the end of every statement period, for use on the credit card company’s rewards system of choice.

However, some credit cards offer bonus points for certain categories, depending on the card’s focus. Categories like gas, groceries, travel or dining are often the basis for bonus categories on certain cards, making them ideal for cardholders who spend more on one particular type of item or expense.

Many rewards cards offer signup bonuses as well, enticing new cardholders with the prospect of a large lump sum of cash back or points rewards if certain spending thresholds are met in the first three months of ownership.

When it comes to deciding which form of rewards you would like, cash back rewards cards are a very popular choice for cardholders. Rather than relying on a points system, these cards usually offer 1 percent in cash back for every dollar spent on the card for purchases. For bonus categories, this number can go up anywhere from 2 to 6 percent.

There are two primary approaches card companies use for organizing rewards programs: single-tier cards that offer an unlimited, flat rewards rate for every purchase made, and a tiered card that offers limited bonus rewards for certain categories, up to a certain dollar value each quarter.

The former category is perfect for ‘spend and forget’ users, while tiered cards allow organized spenders to maximize their rewards.

Travel Cards

Travel cards are a specific kind of rewards card that caters to frequently traveling cardholders – offering rewards in the form of points, cash back, or frequent flyer miles that can be used to pay for flights. Some travel cards also provide bonus rewards for booking hotels through the card.

The best travel rewards credit cards provide all the benefits of a typical rewards credit card – bonus points or cash back on bonus categories, a large signup bonus for meeting a purchase threshold in the first three months of having the card – but with a large emphasis on redeeming them for travel purchases like hotel reservations and flights.

In addition to these perks, they offer no foreign transaction fees, no blackout dates or travel restrictions, and travel amenities like rental car insurance and luggage protections.

If your credit is not strong, or you have made mistakes in the past with your credit usage, you may qualify for credit cards for people with poor credit. These cards do not offer the same caliber of rewards as regular rewards cards, often with no introductory APR periods and a hefty annual fee. However, the recommended credit score to qualify is lower, making it easier to get.

Cards like these are meant for cardholders who need to rebuild their credit after a significant loss in their credit rating, or for those meant to build their credit in the first place. While the cards themselves are not features-heavy, they are advantageous as a means to increase your credit score through responsible spending – a stepping stone to better credit cards.

Business Cards

Business credit cards are meant not for personal use, but to consolidate the expenses of a business (large or small) into one single card. Business cards also tend to be rewards cards, and some small businesses can benefit from cards that offer bonus rewards for expenses like office supplies and phone/Internet utilities.

Business cards offer companies the means to earmark business expenses and separate them from personal spending, making them easier to track from an accounting standpoint. When their rewards are properly used, they can even further subsidize business expenses by using said rewards to offset their balances.

Balance Transfer Cards

Balance transfer credit cards are cards whose primary purpose is to hold a balance taken from another card. When cardholders build up a significant balance on one or more credit cards, they can transfer them to a balance transfer credit card – which typically has a long introductory period of zero interest, and no balance transfer fees during this period.

With the help of balance transfer cards, cardholders with large balances are given the opportunity to pay down balances without having to worry about accumulating large fees every month on a high-interest credit card. While these cards are not very useful from an everyday spending perspective, their primary utility is to buy time in order to pay off debt.

Zero Interest Credit Cards

Zero interest credit cards are cards that entice new cardholders with a long introductory period of 0% APR after getting the card. These periods often last anywhere from six to eighteen months, during which time the cardholder is not obligated to pay interest on the balance they accrue on the card.

While this grace period does not last forever – credit card companies would not earn much profit if they sold cards with no interest – zero interest credit cards carry many similar uses to the balance transfer credit card. They allow for cardholders to hold balances on their card with no consequence, making zero-interest credit cards highly sought after.

Student Credit Cards

Student credit cards are essentially starter credit cards for young people beginning their career and relationship with credit. Many student credit cards operate on similar principles as low-credit credit cards, in that their primary benefits are geared toward building good habits and rewarding responsible spending.

Among the teaching tools student credit cards use to incentivize good behavior include support options for missed payments, bill trackers, budgeting programs and protection from unauthorized purchases. Some student credit cards are directly tied into academic performance, providing modest statement credits for good grades.

Though flexible spending cards offer some much-needed forgiveness in the event of overspending, it can have a negative impact on your credit score. While most credit cards report your credit utilization ratio as your balance compared to your credit limit, flexible spending credit cards will often not report their credit limit.

Secured Credit Cards

Secured credit cards are another type of card meant for cardholders with low or no credit. Unlike other credit cards, which rely on unsecured debt that requires no collateral, secured credit cards require a cash deposit to the bank that comprises your credit limit. The cardholder cannot spend above that credit limit, unless they provide a bigger deposit to raise said limit.

This is an extremely reliable way to build credit for those starting out building their credit careers, or hoping to recover from negative experiences with credit in the past. Secured cards require no lender to assess past credit history or credit behavior; there is no risk, since you are providing the funds. However, with good spending, you can use the card to build your credit.

Luxury Credit Cards

Luxury credit cards are the gold standard for travel credit cards – premium cards that grant the cardholder with significantly higher rewards and better amenities than the average travel card. Recipients of these cards often receive features like access to VIP airport lounges, travel statement credits, travel insurance coverage, and much more.

However, luxury cards come with the kind of maintenance that requires the kind of high-income user the card attracts. Annual fees can run between $400 and $600 a year, and there are few cards with signup bonuses or introductory zero interest periods. If you use the card’s benefits often enough, though, it might be worth paying those costs - provided you can afford them.

What does it cost to maintain a credit card?

It is important to remember the supplementary costs that come with maintaining a credit card. These include the following:

Annual Fees

Annual fees are a lump sum charged to the card’s balance every year as a maintenance cost from the card company. Annual fees are not necessarily a guarantee with credit cards; many cards offer no annual fee for the first year as an incentive to sign up, while some cards have no annual fee whatsoever.

If you are stuck with a credit card that has an annual fee, it is also possible that the annual fee pays for robust features that make the annual fee worth paying. With many cards, cards with annual fees offer higher rewards rates, or provide benefits like free checked bags or companion flights. Luxury and travel credit cards tend to have the highest annual fees on the market.

Interest

Interest rates are the most common and omnipresent type of expense on your credit card – every month, the existing balance on your statement is charged a fee depending on your card’s Annual Percentage Rate (APR). The APR will vary depending on the card and your credit score; most cards will have a variable APR between 15% and 29%, generally.

Some cars offer introductory APRs of 0% for a period of time (usually 6 to 18 months), allowing new cardholders to enjoy the benefits of their card without having to worry about interest. However, after that introductory period has lapsed, the card’s variable APR will activate, and you will have to pay that fee every month you have a balance.

Balance Transfer Fees

Balance transfer fees are charges made to your card as the cost of transferring a balance from one card to another. With credit cards focusing on balance transfers, you typically do not have to worry about a balance transfer fee for at least a short introductory period; this, along with an introductory 0% APR period, is what makes balance transfer cards appealing for cardholders.

However, in most other cases, a balance transfer fee is applied, which is often between 3 and 5 percent of the total debt transferred.

Foreign Transaction Fees

Foreign transaction fees work on a similar level as balance transfer fees but are accrued every time you use a credit card to make a purchase outside your home country.

Many travel credit cards offer 0% foreign transaction fees, which can make them ideal for frequent travelers. When foreign transaction fees are applied, however, they tend to be approximately 3 percent of the amount charged.

Late Fees

Late fees are extremely important costs to consider (and avoid) when dealing with credit cards. If you miss a scheduled payment, your credit card company will charge you a late fee, typically costing between $25 and $35.

Finally, the most important cost to consider with your credit card is your balance. It is important to treat your purchases like a cost as well, as they inform almost every other fee or charge on your card. Your purchase is not fully paid for; you must still pay your credit card’s balance at the end of the month to avoid further fees and late payment charges.

How do I safely (and wisely) use my credit card?

It is not enough to get a credit card – you should be responsible not just with your choice of card, but the way you use it. Responsible, safe spending will keep your accounts secure, your debts manageable, and your rewards plentiful.

Pick the right card for your needs. It is important to do your research to determine what kind of card you want. If you are looking for a card that rewards frequent spending, particularly in a certain kind of category, a rewards or cash back card would be perfect. Conversely, if you need to transfer balances, or subsidize travel, there are cards that cater to those categories as well.

Pay your balance off on time. The most efficient way to manage your spending, and to avoid unnecessary fees, is to pay off your entire balance on your credit card every month. If your balance is $0, you cannot accrue interest, thus preventing you from paying that much more for your purchases.

Take advantage of introductory grace periods and bonus reward categories. Once you find the right kind of card for you, look around for cards that offer the most generous rewards and introductory no-interest periods. If you have a card with no annual fee and robust rewards in a category you spend on often, rearrange your spending habits to maximize those rewards.

Sign your card, or write “See ID.” When it comes to card security, one of the most important things you can do is sign the signature form on the back of your credit card. Merchants are not supposed to accept unsigned credit cards; your signature is a difficult thing to replicate on command, making it harder for card thieves to charge fraudulent purchases to your card.

Alternatively, you can sign your card with the phrase “See ID” – this will encourage merchants to ask the cardholder for identification, which they can then match with the name on the card. This adds another layer of security to your purchases, further ensuring that card thieves cannot use your card without your permission.

Keep your credit card on your person, and never lend to anyone else. This is a fairly straightforward strategy for credit card security, but it must be reiterated – you are the most effective deterrent to credit card theft. Store your credit card in a safe place when it is not being used, and make sure you are the only one with voluntary access to the card.

Should I get a credit card for my business?

If you own a small business, it would be extremely wise to invest in a business credit card. Not only do they separate business expenses from personal ones, they allow for a greater sense of flexibility in business spending. Allotting your expenses to a specific credit card streamlines business accounting, and makes tax deductions easier to track.

Not only are business cards flexible, they are also easier to acquire than small business loans. Furthermore, certain business cards offer rewards programs that can make your business spending even more profitable.

Among the rewards you can find with a business credit card, you may find many identical features commonly associated with personal credit cards:

Of course, individuals cannot get a business credit card for personal use; for the most part, credit card companies require businesses to supply an Employer Identification Number, credit history and proof of revenue when applying for a card. Startups typically require the borrower’s income and personal credit information, but a PAYDEX score is used for long-running organizations.

How many credit cards should I have?

Depending on how responsible you are with your spending, you can benefit greatly from having multiple credit cards. There is no perfect number of credit cards you can have, though economists suggest carrying at least two cards, each a different type.

For instance, you may carry an unlimited cash back rewards card for everyday purchases, along with a travel rewards card (such as a Visa Signature card) for more activity-specific rewards. Generally, it is wise to have one of each different type of credit card (Visa, MasterCard, Amex, Discover) to ensure you have one card for spending no matter where you go.

When considering applying for more credit cards, keep the following in mind:

Only take on as much credit as you can handle. Regardless of the number of credit cards you hold, make sure to pay off your entire balance in full each month.

Do not close old credit cards that you are not using. Having a longer credit history reflects well on your overall credit score. (There are exceptions, however, including if annual fees are no longer worth the effort.)

Get cards that will reward you for the purchases you already make. If you spend a lot on groceries, a cash back card that gives you extra rewards for grocery purchases would be a wise investment.

Find cards with extra benefits that you can use. Many cards offer additional perks like auto collision insurance, roadside assistance and liability protection; look for these cards and determine which rewards you would use most often.

Keep diligent track of your payment due dates and annual fees. Having multiple cards can make it difficult to remember which card payments are due when; stay on top of your expenses and keep your spending within your budget.

Simply put, there is virtually no downside to having several credit cards at once, provided you can handle your balances responsibly and the associated fees are within your budget.

When it comes to your credit score, the only factors that will be affected by applying for multiple credit cards are the number of hard inquiries on your credit report, and the average age of your accounts (both of which affect only a small portion of your FICO score). In fact, having many credit cards raises your overall limit, and lowers your debt utilization ratio.

What do I do if I have bad credit (or no credit)?

If you have made mistakes with your credit before, or are just starting out with credit cards, it may be difficult to get some higher-end credit cards that require larger credit scores. However, there are some credit cards that exist specifically for people with low credit to help them build a record of responsible spending and restore their FICO score.

Get a credit card specifically catering to cardholders with bad credit. These credit cards often have a higher APR than normal, and fewer perks than the rewards and travel credit cards you might find elsewhere. However, they make up for it with accessibility – you can get them despite having a lower than average FICO score.

From there, all you have to do is follow good credit habits: don’t spend above your means and pay off your balances on time. These cards also provide free access to your credit score, as well as credit limit increases for good behavior. On a long enough timeline, good-faith credit activity will increase your credit score to the point where you can graduate to a better card.

Go over your credit report to find trouble spots. Sometimes, having bad credit is not the fault of poor habits; sometimes, fraudulent activity can lower your credit score, especially when it goes unnoticed. Also, if you are repairing bad habits, it is important to make sure that delinquencies on your credit report disappear when they are meant to.

There are many ways to get your credit report – you can make a request for a free credit report with the Federal Trade Commission, by going to AnnualCreditReport.com and filling out a form. (You are entitled to a free report every 12 months.)

Once you have it, look it over for inconsistencies, old delinquencies that should have lapsed, and other discrepancies between your activity and the report. By notifying credit agencies of these errors, you can bring your credit score up dramatically.

If you have outstanding balances, negotiate them down with your credit card company. Often, you will be able to speak with credit card representatives to work out agreements to waive or reduce monthly minimum payments, or lower your interest rate, for the purposes of making paying down your debt manageable.

Some strategies for debt consolidation or management include making a lump-sum settlement (in which you pay a lower balance with a one-time payment), a hardship plan (a lower interest rate or minimum payment due to financial or medical difficulties), or entry in a debt management program.

How We Picked These Cards

We used a number of criteria to search for and determine the best credit cards of 2018. These include the following:

Length of introductory 0% APR periods. This was especially useful for determining the worth of low-interest credit cards and balance transfer cards.

No annual fees. This is a solid baseline advantage for credit cars in all categories, but especially factored into determinations of low-interest and balance transfer cars.

Large cash back or points rewards on specific categories. Depending on the spending category in question (groceries, gas, travel, etc.), we placed higher value on cards with larger rewards percentages for those categories.

Robust signup bonuses. A major consideration for all credit cards, particularly reward cards. Factors considered include the size of the bonus, and the spending threshold required to achieve it.

Lower variable APRs. Applied to all credit cards, but APR ranges are relatively close and depend greatly on personal credit, so they did not weigh heavily in our consideration.

Miscellaneous amenities. These were especially helpful for determining the worth of rewards and travel cards – both their number and quality of said amenities.

Compatibility with other rewards programs. A minor consideration, but a necessary one for rewards cards from the same company.

Reasonable qualifying credit scores. This criterion is chiefly important for credit cards for people with low credit; the lower the credit score, the likelier it is that those who need to rebuild their credit will qualify.

Along these factors, we considered the reputation of their host companies, their accessibility to the average consumer, and our own usage of said cards.

With the help of this guide, you should have a baseline understanding of the different types of credit cards out there, how to use them properly, and how to find the best one for your needs.